Stock market hits new high after Greece gets loan extension

International Monetary Fund managing director Christine Lagarde, European Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, and Dutch Minister of Finance and President of the Council, Jeroen Dijsselbloem, give a press briefing at the end of a special Eurogroup meeting of Finance ministers, at the European Council headquarters, in Brussels, Belgium. U.S. stocks reached record highs after Greece reached an agreement with its eurozone partners on a four-month bailout extension. (OLIVIER HOSLET / EPA)

A deal giving Greece more time to repay its debts swung the U.S. stock market higher Friday and drove the stock market to a record high.

While expected, the deal between the struggling country and its European creditors left investors relieved. Any failure to reach an accord could have sent tremors through markets at a time when Europe is trying to revive its regional economy.

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"It's good this didn't go down to the wire to get resolved," said Paul Christopher, head of international strategy at Wells Fargo.

Stocks started off the day solidly lower. The Dow Jones industrial average fell as much as 107 points. But as rumors and news came out that Greece and its creditors were close to a deal, the market climbed ever-so-steadily higher. The euro also gained against the dollar.

The Dow finished up 154.67 points, or 0.9%, to 18,140.44. The Standard & Poor's 500 index climbed 12.85 points, or 0.6%, to 2,110.30 and the Nasdaq composite rose 31.27 points, or 0.6%, to 4,955.97. The Dow closed at a record high, surpassing its record close on Dec. 26. The S&P 500 also closed at record high.

The Nasdaq, which has yet to reclaim its record high from the dot-com era, in now within 93 points of that March 2000 peak.

In Brussels, the deal reached between the European Union and Greece's recently elected government would extend the country's repayment plan by four months. That is shorter than the six months originally requested by Greece.

In return, Greece has committed to not pursue any "unilateral" measures that might affect the country's budget targets. Greece has committed to provide a list of reforms based on its current bailout program for assessment by Monday.

The deal is a shift from only a day ago, where it seemed like Greece and its creditors were still struggling to reach a basic agreement for the Mediterranean country. Without the agreement, Greece would have only about a week left before it would default on its obligations and cause it to drop the euro currency.

Greece's economy is small, but the potential disruption Greece could have to the global financial system potentially could be huge. In a worst-case scenario, Greece abandoning the euro could embolden political parties in other debt-ridden countries to seek to leave the euro as well.

"A Greek exit is not good for anyone, including the Greeks," said Christopher of Wells Fargo. "If Greece leaves, everyone else could leave and you're left with nothing."

In energy markets, the price of oil fell Friday after a closely-watched count of drilling rigs declined less than expected. That could mean crude supplies will remain ample.

Benchmark U.S. crude fell 82 cents to close at $50.34 a barrel in New York on the last day of trading for the March contract. Brent crude, a benchmark for international oils used by many U.S. refineries, rose one cent to close at $60.22 in London.

In other futures trading, wholesale gasoline rose 2.5 cents to close at $1.641 a gallon. Heating oil rose 11.8 cents to close at $2.112 a gallon. Natural gas rose 11.7 cents to close at $2.951 per 1,000 cubic feet.

The U.S. dollar rose to 119.09 yen from 119.04 yen the previous session, while the euro rose against the dollar to $1.1379 compared with $1.1368 Thursday.